Government Micro Resources, Inc. v. Jackson

• Citation: 624 S.E.2d 63
• Decision Date: 13 January 2006
• Docket Number: Record No. 050943.
• Court: Virginia Supreme Court
• Parties: GOVERNMENT MICRO RESOURCES, INC., et al. v. Alan W. JACKSON. Alan W. Jackson v. Government Micro Resources, Inc., et al.

Page 63

624 S.E.2d 63

GOVERNMENT MICRO RESOURCES, INC., et al. v. Alan W. JACKSON.

Alan W. Jackson v. Government Micro Resources, Inc., et al.

Record No. 050943.

Supreme Court of Virginia.

January 13, 2006.

COPYRIGHT MATERIAL OMITTED

E. Duncan Getchell, Jr. (Robert L. Hodges, Richmond; Thomas E. Spahn; McLean; McGuireWoods, on brief), for appellants in No. 050943 and appellees in No. 050937.

Elaine Charlson Bredehoft, Reston (Kathleen Z. Quill; Charlson, Bredehoft & Cohen, on brief), Reston, for appellee in No. 050943 and appellant in No. 050937.

Present: LACY, KEENAN, KOONTZ, KINSER, LEMONS, and AGEE, JJ., and COMPTON, Senior Justice.

ELIZABETH B. LACY, Justice.

Alan W. Jackson sued his former employer Government Micro Resources, Inc. (GMR) and its Chairman of the Board, Humberto Pujals, Jr., for breach of contract and defamation.¹ The jury returned a verdict in favor of Jackson awarding him $200,500 in compensatory damages on his breach of contract claim and $5,000,000 and $1,000,000 as compensatory and punitive damages, respectively, on his defamation claim. The trial court granted the defendants' post-trial motion for remittitur, reducing the breach of contract award to $112,500, the defamation compensatory damages to $1,000,000, and the punitive damages to the statutory maximum of $350,000. Code § 8.01-38.1.

Jackson, GMR, and Pujals appealed the trial court's judgment and we have consolidated the appeals for our consideration. GMR and Pujals ask us to reverse the judgment of the trial court. They assert that the trial court erred in failing to strike Jackson's defamation claim and that the evidence did not support a finding of actual malice necessary for an award of punitive damages or to overcome the qualified privilege they contend attached to the alleged defamatory statements. Jackson seeks restoration of the jury's compensatory damage award for his defamation claim.

For the reasons stated below, we conclude that Jackson's defamation claim was not opinion, was timely and properly pled and proven; that actual malice was shown by clear and convincing evidence; and that in holding that the compensatory damage award was excessive, the trial court did not consider factors in evidence relevant to that damage award.

FACTS

The following facts are relevant to both appeals and we recite them in the light most favorable to Jackson, the party prevailing in the trial court. City of Lynchburg v. Brown, 270 Va. 166, 168, 613 S.E.2d 407, 408 (2005).

Following his discharge from the army, Jackson served eight years with the National Security Agency where he qualified for top secret and "specially comparted information" security clearances following satisfactory completion of multiple "full lifestyle polygraph" examinations. Upon leaving the government, he worked for various technical systems companies as senior officer or chief executive officer developing a reputation for successfully turning financially distressed business units into profitable entities and expanding the companies.

In 2001, GMR, a technology resale and services company, sought to increase its services business. To accomplish this goal, GMR recruited Jackson to serve as president and chief executive officer because of his connections with the federal government, his top secret security clearances, and his extensive experience with technology services in both the public and private sectors.

Jackson began work at GMR on July 9, 2001. Within a short period, Jackson realized the company's financial situation differed significantly from what he was led to believe when he accepted the position. For example, GMR's line of credit was significantly reduced because Pujals caused a transfer of properties from the company to himself by using the company's line of credit to satisfy the mortgages on the properties. Jackson also learned of a $1.1 million loss GMR sustained in the first six months of 2001, a $400,000 accounting error reported by the chief financial officer in August, and a $1.4 million discrepancy between the company's listed inventory and that which it actually held.

In October 2001, as part of its effort to increase its services business, GMR began discussions with Seisint, Inc. (Seisint), a technology company with a super computer it wished to market to the federal government. Seisint did not have contacts with the federal government, but GMR could provide those contacts through Jackson. The Seisint executives, Henry E. Asher and Daniel W. Latham, worked directly with Jackson. Eventually, GMR and Seisint executed a memorandum of understanding detailing GMR and Seisint's agreement to jointly market Seisint's super computer to the federal government.

The remainder of 2001 and the early months of 2002 did not bring a significant change in GMR's financial status. On March 5, 2002, GMR terminated Jackson's employment for cause. The termination letter accused Jackson of "gross mismanagement" of GMR's finances. Pujals admitted, however, that when he wrote the letter he did not have "a specific amount of money in mind" as a basis for that statement.

According to Asher, Pujals called Asher either the day Jackson was terminated, or the next day, and told Asher that Jackson "mismanaged the company and cost him a tremendous amount of money." Latham testified that at a meeting in April 2002 between GMR and Seisint executives Pujals initiated the subject of Jackson's firing and said that "Jackson had been removed from his job because he lost $3 million." Pujals testified that at the April meeting he had responded to Asher's question regarding the details of Jackson's termination by saying the company, and not Jackson, lost $3 million, which resulted in Pujals having to let Jackson go. Pujals admitted that Jackson did not lose $3 million for GMR and that "it would be false if someone said that."

Following his termination, Jackson entered employment discussions with Seisint. Because of the information Asher received from Pujals, Seisint, at Asher's direction did not hire Jackson for a management position but rather engaged him as a sales representative and consultant from March 6, 2002 until December 31, 2002. On January 1, 2003, Seisint hired Jackson as senior vice-president of government programs, which Jackson did not consider a management position.

Pujals was upset when he heard that Jackson was working for Seisint because Jackson would not have known about Seisint if not for GMR. Particularly, Pujals said: "And to find out — and to find out that after we fired him for cause, that he's already employed immediately after and he has already a relationship right after was very, very — a very, very mean thing for him to do."

I. The Defamatory Statements

The jury was instructed to return a verdict in favor of Jackson if it found that Jackson proved either of the following two statements:

Mr. Pujals called Hank Asher within a few days of terminating Mr. Jackson (March 5, 2002). Mr. Pujals told Mr. Asher that Mr. Jackson had mismanaged GMR, had lost what Mr. Asher perceived or recalled as an exorbitant amount of money, and that Mr. Pujals had to let him go as a result; or

In April 2002, Mr. Pujals told Daniel Latham, President of Homeland Defense [and] Seisint, Inc., and/or Mr. Asher, founder and CEO of Seisint, Inc., that he fired Al Jackson because Mr. Jackson lost $3 million.

GMR² contends that the first statement was not contained in Jackson's pleadings and was not timely asserted, that both statements were opinion and therefore could not be the subject of a defamation claim, and that Jackson did not prove that GMR uttered either statement in haec verba or with malice.³

A. Pleading the Defamation Claim

Whether Jackson failed to plead and timely assert the first statement, as GMR contends, depends on whether that statement was included in the description of the alleged defamation contained in the motion for judgment and a subsequent bill of particulars. A motion for judgment asserting a claim for defamation that does not recite all the specifics of the alleged defamatory statement, although not good pleading, may nevertheless state a "substantial cause of action imperfectly." Federal Land Bank v. Birchfield, 173 Va. 200, 217, 3 S.E.2d 405, 411 (1939). The particulars of the allegedly defamatory statement may be supplied in a bill of particulars. Id. However, if, in supplying such specifics, a litigant identifies an allegedly defamatory statement that was not reasonably included in the original pleadings, such a statement constitutes a separate claim of defamation and must comply with Code § 8.01-247.1, the one-year statute of limitations for defamation claims. See id. at 217-19, 3 S.E.2d at 411-12.

In this case, Jackson's motion for judgment recited that

Humberto ("Tico") Pujals and GMR made false and defamatory statements to executives of Seisint, Inc., stating that Mr. Jackson lost $3 million for GMR and was terminated as a result.

In his bill of particulars, Jackson contended that "[o]n or around" April 12, 2002, at a business meeting between certain identified and unidentified Seisint executives and certain representatives of GMR, Pujals stated that in 2001 Jackson lost either "a significant amount" of money for GMR or "enormous amounts" of money for GMR. The bill of particulars also recited that "[o]n or around" April 12, Pujals "made the statement to a Seisint executive (who has requested not to be named) that Mr. Jackson `lost $3 million for GMR last year.'"

On October 8, 2004, Jackson filed a supplemental answer to GMR's first set of interrogatories based on the de bene esse depositions of Asher and Latham taken by GMR September 20, 2004 and July 13, 2004, respectively.⁴ In that answer, Jackson stated that Pujals called Asher "either the day, or within a few days of terminating Mr. Jackson" and told Asher that Jackson had "mismanaged" GMR, that Jackson lost what Asher "perceived or recalled" to be an "exorbitant amount of...